New research from Spotify shows that music piracy via BitTorrent dropped 20% in Australia during the first year the streaming platform was operational. The drop was mostly driven by casual file-sharers, and the number of hard-core pirates remains stable.

Since its launch Spotify always had a very clear goal in mind. Compete with piracy and make it obsolete.

To see how the company is faring on this front Spotify regularly researches piracy rates in countries where they enter the market. Thus far the results have been rather positive.

In 2012 the streaming service entered the Australian market and Spotify’s own research now shows that music piracy via BitTorrent dropped significantly during the following year.

In a keynote speech at the BIGSOUND music conference today, Spotify’s Director of Economics Will Page reveals that the volume of music piracy has decreased 20% between 2012 and 2013. Similarly, the number of people sharing music via BitTorrent in Australia has gone down too.

“It’s exciting to see that we are making inroads into reducing the music piracy problem within such a short space of time in this market,” Page says.

“It shows the scope for superior legal services (offered at an accessible price point) to help improve the climate for copyright online,” he adds.

Spotify shared the graph below with TorrentFreak, showing that the drop in downloads was observed between December 2012 and 2013.

Less music downloads and sharing IP-addresses

While the overall volume is down not all pirates are giving up their habit. The research found that it’s mostly the casual file-sharers who stop sharing, while the hard-core pirates remain just as active as before.

Also worth noting is that interest in illegal music downloads pales in comparison to that of other media. The research found that the demand for TV-shows and movies is four times that of music.

Spotify suggests that it’s partly responsible for the drop in music piracy, but can’t say to what extent. It’s also not clear how the demand for and volume of other forms of piracy changed in the same time period.

Page sees the drop in music piracy as an encouraging sign, but notes that more has to be done. While Spotify’s Director of Economics doesn’t comment on specific anti-piracy proposals the Government has put forward, he does stress that both carrots and sticks are required to address the issue.

“Let’s be clear, Australia still faces a massive challenge in turning around its much talked about media piracy challenge, and it always has, and always will, take a combination of public policy and superior legal offerings,” page says.

“The downward trend in piracy volume and population suggests superior music legal services like Spotify are making a positive impact, and this has proven to be the case in Scandinavia, but it will take both carrots and sticks to turn the market around.”

The research seems to suggest that services like Spotify are reasonably good carrots, but what the sticks look like will have to become clear in the months to come.

Update: We added the graph Spotify shared with us after publication. This shows that there initially was an in increase in piracy, and that the downward trend started a few months after Spotify became available. In part, the company attributes this delayed effect to the relatively slow organic adoption.

Spotify further explains that it “contributed to the decline” thanks to its fair price, great performance and wide availability.